Isiklar

completed

Summary Of Project Information (SPI)Project NameTurkey - Isiklar TurkeyRegionEuropeSectorProject No010063Projected Board DateMarch 27, 2000Company NameIsiklar AmbalajTechnical Partner and/or Major Shareholders The project sponsor is Isiklar Holding, the core company of the Isiklar Group in Turkey. Isiklar Group is comprised of several subsidiaries active primarily in four core businesses: (i) packaging materials; (ii) building materials; (iii) construction and engineering; and (iv) services. Isiklar Holding was incorporated in Istanbul in 1974. Isiklar Holding and its subsidiaries are controlled by the Isik family (primarily three brothers) through their majority ownership (94.2%) in Isiklar Holding and also direct shareholding in certain of its subsidiaries. Ambalaj is listed on the Istanbul Stock Exchange and Isiklar Holding owns nearly 78% of the enterprise.Project Cost Including proposed IFC investment The total project cost is projected to be $42 million, including $10 million debt refinancing for Isiklar Ambalaj and $32 million needed to complete the company''s Celhart project in Bulgaria. The proposed IFC investment consists of a convertible loan of up to $10 million to Isiklar Ambalaj in Turkey. The same amount will be committed by the European Bank for Reconstruction and Development (EBRD) in parallel.     Location of project and Description of site Isiklar Ambalaj owns five sack factories in Turkey (in the following cities: Bartin, Konya, Izmir, Elazig and Adana), a sack factory in Egypt and Celhart kraft pulp and paper mill in Bulgaria. Description of Company and Purpose of Project Isiklar Ambalaj is the leading Turkish manufacturer of kraft paper sacks (for use mostly in the cement industry) accounting for 65% of both total production and sales in 1998. Ambalaj is listed on the Istanbul Stock Exchange and Isiklar Holding owns nearly 78% of the enterprise. The project will help ensure the continuation of a viable investment in Bulgaria (namely, the Celhart pulp and paper modernization project to which IFC has previously invested $15.4 million). Moreover, the project will help ensure the financial viability of Isiklar Ambalaj in Turkey. With this project, IFC will help ensure the continuation of a viable investment in Bulgaria. The Celhart project is an export-oriented project, and will increase Bulgaria’s net foreign earnings. Moreover, the project will ensure that Celhart retain its employees. The project includes preventive and corrective measures that will significantly improve the plant’s environmental status. IFC’s role is further augmented by the fact that the proposed investment plan will help ensure the long-term viability of Isiklar Ambalaj, which will be the biggest customer of Celhart. Environmental Category and IssuesThis is a category B project according to IFC''s environmental review procedure and the following environmental and occupational health and safety issues were reviewed: progress on environmental and health and safety measures in IFCs existing investment in the Celhart plant, air, water and solid waste emissions from other plants in the Group, implementation of a group-wide Environmental Management System, and fire safety and worker health and safety issues in all facilitiesSack Manufacturing Plants: These will operate in compliance with World Bank Group requirements for air emissions, solid waste, wastewater, and occupational health and safety except for secondary fuel containment (absent at some facilities) and the sponsor will ensure that this is examined and corrected at all plants as required. The Izmir plant has recently received the international environmental certification - ISO 14001 and remaining plants are in the process of preparing for certification, and are training staff, identifying issues and preparing procedures. The company plans to implement ISO 14001 systems at all its facilities.Celhart Pulp and Paper Mill: The Celhart mill is located in Stamboliyski, Bulgaria. The plant is an existing IFC investment, received environmental review in 1998 and an Environmental Review Summary was prepared and disclosed at that time. An environmental action plan (EAP) was prepared to address compliance failings at that time and Celhart has made some progress in the interim in addressing these issues. However, since that time, the operation has experienced financial difficulties and the plant has been essentially shut down. As part of the appraisal for the current investment, the EAP has been reviewed and updated and the current investment will permit Celhart to resume the plant upgrading to achieve compliance with WBG requirements. Additionally Celhart has agreed to an independent fire and life safety audit, in order to assist in their planning process and to prioritize future actions in this area. This audit will be a condition of disbursement of this loan.     The is from the InfoShop.Host country location of environmental documents     Date SPI sent to InfoShop      “This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).